MINUTES

BOARD OF DIRECTORSDIOCESAN COUNCIL

JUNE 18, 2011

TRINITY CATHEDRAL

2620 CAPITOL AVE.

SACRAMENTO, CA

Present:

Members of the Board:

The Rt. Rev. Barry Beisner, The Rev. Deacon Dave Ferrell, Rebecca Freie, The Rev. Cliff Haggenjos, Lynn Hill, Stephen Lawrence, Suzanne Phinney, Jim Sargent, Charles Mack (Chancellor), Tom Ewart (Treasurer)

Members of the Council:

The Rev. Jeff Frost (Dean), Charlie Chapman, Margaret Dunning, The Rev. John Mangels, The Rev. Jeanne Forte (Dean), The Rev. Deacon Cindy Long, The Rev. Phil Reinheimer, The Rev. Craig Kuehn (Dean)

Staff:

Cassie Bangerter, Thea Mangels, Rick Harrison Smith, The Rev. Canon Britt Olson, Canon Bobbi Yeo

Absent:

Members of the Board:

Lynn Zender

Members of the Council:

Carlton Allen, Robert Hall, George Henry, The Rev. Lucretia Jevne, The Rev. Susan Plucker, The Rev. Canon Christopher Seal,The Rev. Ron Griffin (Dean),

Staff:

Jenifer Campo

10:00 a.m. ICall to Order & Meditation+BLB

Zimbabwean Discipleship prayer:

IIMinutes

  • Board Minutes of 3/12/11 were approved (Sargent, Freie MSP) with the correction that Rebecca Freie was in attendance.
  • Council Minutes of 3/12/11 were approved as written (Mangels, Long MSP)

IIIBishop’s Report+BLB

  • The bishop reported on the success of his sabbatical. He believes that he will be reporting on his sabbatical in upcoming Auroras and that he will be doing a better job of being our bishop as a result. One of the things that was made clear to him speaking with leaders and future leaders of the church is that our mission focus in this diocese is absolutely dead on. There are three pieces to our mission statement: making disciples, raising up saints, and transforming communities for Christ. Our work is building the Kingdom. All of our work needs to be about that.
  • We have a new rector in Sebastopol, Christy Laborda comes to us from the Diocese of El Camino Real.
  • Lee Gustafson has had to move to the Bay Area and resign from Council, so we will need to thank him for his service.
  • Convention 2011
  • We are experimenting – this year we will start with the service at All Saints’ on Friday night and do all of our business on Saturday. No banquet and no addressother than the Bishop’s address (which is canonically required).
  • The idea is that this is the business meeting. The bishop’s conference is the training and program and ministry gathering in the spring.
  • We will be on a three year cycle and on the year that we elect general convention deputies we will have a longer convention. We cannot shorten that process, so we will have the festive version of convention with celebrity guests.
  • It is VERY important to have the convocations. Make sure you encourage people to attend the convocations so they have material in advance and are familiar with it.

IVCanon to the Ordinary – Olson+

  • 100th anniversary in Willows. They are looking forward to the ordination of Gregg Nolta. They invited the community for an ecumenical baccalaureate service even though they had no seniors of their own. Twenty percent of the graduating class of the local high school participated. Britt was the speaker.
  • Britt was also invited to be the speaker at the retreat for the brotherhood of St. Andrews. They were focused on evangelism.
  • Britt was very impressed with the beautiful building at St. John’s in Roseville.
  • Britt is leaving for professional and personal commitments June 24th through August 9th. She will be unavailable for some of this time.
  • The proposal for a ministry development position is in response to the fact that some congregations are no longer following the traditional path for transition in clergy leadership.
  • Congregational Vitalization and Church Response Team are now meeting together twice a year to coordinate their efforts. An increasing number of congregations need help from the Church Response Team.
  • Britt is now looking at planning her sabbatical. She is looking tentatively at August, Sept, and Oct of next year. Britt will be forming a committee to plan her sabbatical.
  • Diocesan Magazine – The new magazine is 89 cents an issue which is significantly down from $1.50 an issue which was the cost of the old newspaper. Please make sure that you are sharing this magazine in your congregation. Please share the magazine anywhere you go. This is a great tool for evangelism. Churches are encouraged to ask for more copies so that people can share them.

VExecutive Council - +BLB

During the bishop’s sabbatical, a committee was formed of the president of the council, the president of the board, the president of the standing committee, the executive assistant, the canon to the ordinary, and the canon for administration and finance. They met twice a month. This committee has expressed a desire to continue meeting now that the bishop has returned.

VIFoundation Report – EFNC Board Members - David Bundesen, Peter Harvey, and Marcie Larkey

The $70,000 from the corpus that has been going to the Foundation can be used either for the Foundation, for new church planting, or it can be reinvested in the Diocese. Diocesan convention 1991 resolved that the foundation should be self supporting. They are asked today to present their plan to become self-supporting.

  • The Foundation refocused their mission to be in closer alignment with the diocesan mission.
  • Vine and Branch is a donor recognition society – it is designed to thank those who have made a promise of a future gift in their will.
  • They developed a life planning workshop and will hold regional workshops around the diocese.
  • The Foundation wants to develop a database of the members of the diocese which would track donations.
  • They also would like to share fundraising ideas with and between churches.
  • They will share with the diocese and with churches information about the Foundation and what it is that they do.
  • They propose that they terminate the executive director’s salaried employment by the end of the year and employ him as a contractor for specific projects instead. (Gifts in kind would still be processed by Rick through his contracted services.) They propose that they move forward with their 5 objectives listed in their presentation. They also wish to engage clerical support as needed. They are planning to utilize the qualified professionals on the board.
  • The Foundation will report annually on the results of their efforts.

Jim Sargent asked for an operating budget of the Foundation. The board will discuss it before acting on it.

VIISt. John’s School, Roseville – Paul Hancock+ and Mark Chompec (chairman of the board)

  • St. John’s School has several outstanding loans; the one that concerns this body is the Growing in Unity loan for $45,000 which was originally held by the school and the church jointly. The church has paid their portion back, and the loan is now held by the school alone. They have missed some interest-only payments, and they have not paid their principal payment. They also owe money on an Endowment and Memorial Trust loan.
  • Their principal and bookkeeper, Sandee Lombardi, has left and they have engaged the services of Utonomy to help them straighten up their books.
  • In addition to the Growing in Unity Loan, they also owe the diocese for back workers’ compensation. They would like a 72 month loan to incorporate both sums with an interest rate of 4% and amonthly payment of approximately $865.
  • Tom Ewart asked what will be different in the 72 months that will make it possible to repay this? They will not be able to build a new campus and are looking for a 10 year lease elsewhere that will theoretically allow the cash flow to pay back the loan. They want 60,000 sq. ft. of space.
  • Jim Sargent mentioned that where they are now, they have little to no rent – and they have missed loan payments both on the GUI loan and the E&MT loan. How will this new arrangement be better for repaying the loan? The new lease would be a graduated lease, with very low payments for the first five years, and high payments for the second five years, so it would be possible to repay the loan and then the school may be in trouble. They will raise tuitions 5% per year and hope to grow student body 5% per year. They are growing slowly but feel that the new location is a better growth location.
  • Charlie Chapman asked about the competitive advantage of St. John’s. One advantage is that whereas even the Catholic schools are putting 35 students in a room, St. John’s is limiting class size to 18 students. Stephen Lawrence asked about reenrollment percentage and was told it was 91%.
  • The school is going to ask the E&MT to change the loan arrangements and spread that loan out over 10 years. Those payments are $1100 and they are $7,000 behind.
  • Jim Sargent said they are not a diocesan entity so we cannot require that they engage with us, but he requested that they tell us more information about what is happening. The church in Roseville is a member of the corporation of the school. Canon Britt asked how it would affect the church if the school defaulted on their loans. Paul+ said that the church donated a piece of land to the school which is the property that was used to put the lien against for the loans.
  • The $220,000 that they borrowed from the E&MT was used for building the new school. They used $160,000 to buy architectural plans. The intention was to pay the diocese back when they took out the loan to build the school. Commercial loans are just very hard to get in this economy. You now need to have at least 50% cash in hand.
  • Jim Sargent asked Paul what the consequence to not restructuring the loan was. Paul+ said, “You don’t get your money back.” Board members indicated they were not ready to act on the loan proposal today. The Board of Directors resolved to table the request of the school to renegotiate the Growing in Unity loan and workers comp until they are able to provide cash flow projections for 10 years and a copy of the lease or proposed lease that will be executed for their new location. (Haggenjos, Hill MSP)

VIIICanon for Administration and Finance

  • Bobbi recently attended the Buildings for a New Tomorrow conference along with several other members of the board and diocese. This conference offered ideas for building use and merging churches. If you or people you speak with are dealing with difficult issues related to buildings, please speak with her.
  • She also went to CODE with Britt where the Presiding Bishop was one of the speakers. The conference in 2013 will be in Sacramento.
  • She went to the annual meeting of the Church Insurance Company in Vermont and learned about church risk assessments. This is a great service which helps churches learn about safety concerns in their facilities. She also learned about preparing for disaster plans. Margaret Dunning and Bobbi will talk about the disaster plan.
  • April, 2011 Financial Reports & Accounts Receivable Aging – Cassie
  • Balance sheet: We are still waiting on the final fire information, the costs for which are not included in the 2010 balance sheet, nor is the close-out of the lay pension plan. These items will be completed before the 2010 audit.
  • The cash flow mix has changed for the diocese with the new situation since the fire. The current assets in April are lower than in March as a result of investing them. Cassie is still working to evaluate the cash flow needs of the diocese.
  • Budget to Actual – of the 350,000, $250,000 is from unrealized gains on investments. The earnings on the E&MT investments are up, which also increases the amount allocated to the Foundation.
  • The fire created changes in what the operation looks like. There is no cost associated with the Annex. There is no depreciation on the building, no utilities cost, but there is now rent cost which we never had before.
  • The cost of the new building is almost a wash, in fact, in the projections for the next year it looks like next year it will be a $2000 savings.
  • Aging – Since the Jubilee forgiveness, this list is now of genuine concern.
  • St. George’s in Carmichael is in transition, they are planning to catch up as they decrease their priest to quarter time.
  • Fairfield has scheduled a meeting with Canon Britt.
  • Marysville is working with Lynn Zender on the 2009 payments and 2010.
  • St. John’s Petaluma worked with Charlie, accounting will check the audit to see if there is a new reconciliation.
  • Rancho Cordova - we are not sure what is happening.
  • St. Paul’s Sacramento has not been making payments and Bobbi will contact them.
  • Sonoma is involved in the 2009 jubilee forgiveness.
  • Accounting is working with St. Helena to discover why there has been no payment.
  • Stephen Lawrence and Cassie and George Henry will connect about Vacaville.
  • Paradise has started making health insurance payments.
  • Quincy has consistently shown up on this report for the Missionary Advance Loan.
  • 2012 Range Sheet – Canon Bobbi Yeo

The parochial reports are used to establish apportionment rates, the number of delegates for convention, and the salary range for clergy for the year. 4 churches increased in range and 11 churches decreased in range. There is currently no COLA recommended; the Employment Practices and Benefits Committee will make a recommendation in September, and this will be considered at the October 1 meeting.

  • EMT Reserves for bad debts – Cassie Bangerter

The E&MT trustees have looked at outstanding loans and determined an appropriate loan loss reserve. They request that this group instruct them to reserve the appropriate amount over a period of 5 years so that if a loan goes bad the earnings would still be generated. The Board of Directors resolved to instruct the Trustees of the Endowment & Memorial Trust to establish a bad debt reserve of one percent of the current loan balance each year, beginning this year, until the reserves are five percent of the outstanding balance. (Sargent, Ewart (MSP)

  • Diocesan audit – 2010 status – Cassie Bangerter

The audit is tentatively scheduled for October. Because of the fire, Cassie will not be able to complete the net asset reconciliation/ research in time for the 2010 audit.

  • Apportionment Resolution – Charles Mack

Convention adopted a resolution on apportionment forgiveness of 50% for 2009 but it did not specify what individual was able to sign the agreement on behalf of the diocese. The Board of Directors resolved to designate the Canon for Administration and Finance as the person authorized to adopt apportionment relief agreements for the year 2009 prepared in accordance with Resolution R2-10. (Mack, Ewart MSP)

IXJoint Committee Reports

  • Structure Committee – Jim Sargent/Mary Hauck+
  • The Structure Committee was tasked to think about governance structure that began and ended with congregations. They are recommending 1) the creation of a Council of Deaneries and 2) a merging of the Board of Directors and Diocesan Council to form a Board of Trustees. The current configuration of four deaneries would be increased to form additional, smaller deaneries.
  • Resolved on this 18th day of June, 2011 that the Board of Directors and Council of the Episcopal Diocese of Northern California express our sincere thanks to Lee Gustafson for his leadership as chair of the Diocesan Structure Committee and a member of Diocesan Council. We further resolve that the Board and Council wish Lee and his wife Janet good health and much happiness in their new surroundings and we always welcome you back to the Diocese of Northern California. Moved by Jim Sargent (Board), John Mangels+ (Council) Seconded. Motion passed unanimously with no abstentions.
  • 2012 Budget – John Mangels+/Charlie Chapman/Canon Bobbi Yeo

The budget committee wants feedback on several items:

  • Legal costs: $5,000 – this has no objection.
  • Building costs, until such time as those buildings are sold - no objection.
  • The budget committee would like the Board and Council to direct them to either fund the new staff position (Ministry development coordinator) and cut other places, or to fund it and raise staffing costs. The Bishop would like to see dual budget scenarios, one with the position funded and one without.
  • Britt’s sabbatical costs should go in the budget.
  • COLA/merit increase was discussed in the absence of staff.
  • Foundation –the board will address this at their August meeting.
  • Restructuring – currently the deanery money has been moved to regional groupings, which is $13,000. Is that enough? The bishop has a consultant in mind and can discover the cost and give additional feedback.
  • Reserves for specific events like General Convention, Lambeth, Provincial travel, sabbaticals… the bishop says we do not need the $14,500 budgeted for provincial travel.
  • Foundation – Charlie proposed a small fee for accounting costs associated with funds managed by the Foundation. and reconciliation.
  • Congregational Vitalization – Olson+ See written report.
  • Employment Practices & Benefits – Canon Bobbi Yeo
  • Insurance array - The Board and Council resolved to give authority to the diocesan Employment Practices & Benefits Committee to review and make contract commitments annually for the health insurance array for diocesan and church employees. (Ewart, Ferrell MSP)
  • DHP implementation - It is mandated by General Convention that all dioceses participate in the Medical Trust and have parity between clergy and lay employees by January 1, 2013. The Diocesan Board of Directors and Council resolved to set January 1, 2012 as the deadline for churches and diocesan institutions obtaining benefits through the Church Medical Trust to fully implement the provisions of the Denominational Health Plan.(Mangels, Phinney MSP)
  • Haiti campaign – Cliff Haggenjos+

Cliff described the national campaign as a “program in a box.” He has been training regional coordinators. The campaign will be rolled out at Convention and conclude during Epiphany.